BERLIN, Jan 15 (Reuters) - An election on Sunday in Germany's second-biggest state will be a crucial test of Chancellor Angela Merkel's chances of winning a third term in the autumn.

It will also showcase the man who may prove best-placed to succeed her as leader of the CDU, the country's biggest conservative party - and possibly even as chancellor.

David McAllister, the West Berlin-raised son of a Scottish soldier and a German mother, became premier of Lower Saxony by default in 2010 when his predecessor Christian Wulff was hand-picked by Merkel for the ceremonial post of president.

On Sunday, the photogenic 42-year-old known as "Mac" has a chance to win his first big election and consolidate his status as star of a new generation of Christian Democrats jostling to take over from the popular Merkel once she releases her grip on power.

"McAllister is definitely in the small circle of CDU leaders from which the conservatives will pick their next chancellor candidate," said Gero Neugebauer, a political scientist at Berlin's Free University.

"If he succeeds in leading the CDU to a respectable result in Lower Saxony, despite all the difficulties they've faced there, then he will automatically be considered a top candidate to succeed Merkel."

Merkel, who turned on her own mentor Helmut Kohl when he was engulfed in a party funding scandal, has seen off a series of male would-be rivals herself. Others have shot themselves in the foot while waiting for her to falter.

Last year Wulff quit as president over a personal finances scandal and "princeling" Norbert Roettgen lost his cabinet post after an election rout in the North Rhine-Westphalia region.

McAllister, it seems, has learned from their mistakes. Rejecting the glitzy style of his former mentor Wulff, he tries to project sobriety like Merkel.

He has ruled out abandoning the sleepy state capital Hanover for the bright lights of Berlin if he loses on Jan. 20 - avoiding the mistake that cost Roettgen his job.

"My place is in Lower Saxony," says McAllister.

EVERY MAN FOR HIMSELF

Such patience could earn him the nomination in 2017 when Merkel's term would expire if she wins the federal election in September, as polls suggest.

McAllister is the most popular politician in Lower Saxony, far ahead of his Socialist SPD rival in the election, Hanover mayor Stephan Weil. This has helped the CDU build a comfortable 6-8 point lead over the SPD but is no guarantee of victory.

If McAllister's Free Democrat (FDP) coalition allies fail to win the 5 percent necessary to make it into the state assembly, he could be ousted on Sunday by the SPD and Greens.

Despite that, McAllister has resisted calls to ask CDU voters to split their tickets to help the FDP, while sending subtle hints that he would welcome a boost for his partner.

On Tuesday he told local radio: "I'm expecting them to get into the local assembly under their own steam. In an election it is every man for himself."

The latest surveys suggest the FDP could yet make it in, giving McAllister a shot at a dramatic come-from-behind victory that would boost Merkel's chances of re-election eight months from now and burnish his own reputation.

An admirer of Prime Minister David Cameron and his drive to modernise Britain's Conservatives, McAllister echoes Merkel's reformist ideas for the CDU, including more radical ones like ditching nuclear power and backing a minimum legal wage.

In return for his loyalty, Merkel is making almost daily appearances in the last week of campaigning in Lower Saxony.

The SPD has no such luxury: its candidate for chancellor, Peer Steinbrueck, is so unpopular that McAllister jokes that he should campaign in Lower Saxony "as much as possible".

MAC'S PERSONALITY CULT

With four in 10 of Lower Saxony's just over 6 million voters still undecided, the "I'm a Mac" campaign - complete with bagpipes, giant posters and the jingle "Our chieftain is a Scot/We're a tough clan" - is betting on McAllister's boyish charm so much the SPD has dubbed it "a Cuban-style personality cult".

This too mirrors a national trend where support for the CDU lags far behind Merkel's own popularity, thanks partly to a consensus-driven style that McAllister emulates. He talks about "cross-party" solutions to ensure top-quality education, economic growth and financial stability in Lower Saxony.

Just as Merkel cites the mythically thrifty "Swabian housewife" as a model, McAllister plays with his Scottish heritage and his countrymen's reputation for fiscal tightness.

If he delivers on his goal to balance the state budget by 2017, he says, it will be the first time since British occupation in 1946 under Sir Gordon Nevil Macready - another Scot.

McAllister describes himself as "reliable, engaged and well-informed. With a touch of British understatement".

Although he plays up his roots by donning a kilt or tossing the caber - a Highland sport involving throwing a giant wooden pole - he has impeccable credentials as a German conservative.

He attended a German boarding school, did military service in a Panzer battalion and studied law under a CDU scholarship.

"I'm a German citizen and I have lived here in Germany all my life. So Germany is my home," he told Reuters Television in Hanover.